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How to Raise Your Credit Score by 100 Points

The two most important parts of your score are your payment history and your amounts owed, so those are great places to start.

For folks with bad credit, improving that score is step number one on their journey to financial fitness. Otherwise, when times get tough and they need to borrow money, they’re going to be stuck taking out predatory no credit check loans and short-term bad credit loans like payday loans, cash advances, and title loans to make ends meet (which probably won’t end well).

Raising your score means being able to secure lower interest rates and better financial products. Even if your score is just okay, taking that score from “good” to “great” could be the key to unlocking your financial future. If you want to raise your credit score by 100 points or more, here’s what you should do.

Check your credit report.

Your credit score is based on the information contained in your credit report. These are documents that catalog your history as a borrower, and they are compiled by the three major credit bureaus: Experian, TransUnion, and Equifax.

As such, the best place to start when fixing your credit score is with your credit report. Not only will it give you an idea of what areas you need to fix, but it might even contain mistakes that are artificially lowering your score.

And since you can request one free report from each credit bureau, that means you can get as many as three free credit reports annually!

“The credit bureaus process untold trillions in payments and accounts, and they make mistakes all the time,” said Brian Davis, co-founder of SparkRental.com (@SparkRental). “It’s your responsibility and your responsibility alone to make sure your credit report is accurate, and that you don’t have errors hurting your credit score.”

Start building your payment history.

There are five different categories of information from your credit reports that make up your credit score. The most important category is your payment history, which makes up 35 percent of your score. When fixing your credit score, paying your bills on time is going to be key.

“Pay all accounts on time every single month,” said Davis. “Even if you can only make the minimum payment, make sure it’s on time because late payments mar your credit score.”

“Credit cards must be paid before anything else, like utility bills, (although not before the mortgage),” advised Abramson. “Wait for 30 days and your delinquency may be reported by your credit card issuers.”

They aren’t kidding; even one late payment that’s reported to the credit bureaus could dramatically lower your score. If you know you’re going to be late, call the company in question to see what can be done.

You can also take a look at your bill schedules to see if a certain cluster of due dates is causing financial strain. If you call your lenders or utility companies, the odds are pretty good that you can have those due dates changed to ease the pressure.

But what if you don’t have any loans or credit cards? How do you start building your payment history then? Don’t worry. There’s a solution.

“If you’re new to credit or have weak or poor credit, become an authorized user on someone’s credit card,” advised Debt AssassinRJ Mansfield (@DebtAssassin1). “As an AU you are never responsible for payments, but it will be reported on your credit report and help your score.”

And if you can’t become an authorized user, try taking out a secured credit card to start building a better payment history. Above all else, a good credit score begins with paying your bills on time. There’s no way around it!

Keep your credit utilization low.

The second most important part of your credit score is your amounts owed, which makes up 30 percent of your total score. If you have too much outstanding debt on loans and credit cards, your score is going to drop. Likewise, reducing that debt load will help improve it!

However, there one specific aspect of your amounts owed that you should keep an eye on, as it can have a huge effect on your score: And that’s your credit utilization ratio, which affects any debt like credit cards where you can borrow up to a certain credit limit.

“One of the metrics that determine your credit score is the ratio of credit used to credit available. Keeping all your balances below 30 percent of the limit keeps your score higher,” said Davis.

This goes beyond paying off your credit card balances every month. To make sure you don’t get caught flat-footed by the start of the billing cycle, you should try and keep your balances below thirty percent at all times.

“Try to pay your credit card bill BEFORE your statement is cut rather than by the due date,” said Abramson. “Most credit card issuers report your balances to credit bureaus around the time your statement closes.”

And in terms of maintaining lower balances, Abramson went even further. “Try to keep your utilization ratio (the ratio of your debt to your line of credit) below 10 percent for each of your credit cards,” he said. “That’s an aggressive goal, but your utilization ratio is the second most important component of the FICO score.”

Let’s be clear: 30 percent isn’t some kind of magic threshold; dropping underneath it won’t magically “fix” your score. It’s a good place to start, but you should be getting your balances as low as possible—on the way to paying them off entirely.

In order to bust some myths surrounding the 30 percent line, Mansfield conducted a personal experiment using his own credit cards. Here’s what he found:

“Popular advice from ‘so-called’ credit experts is that it’s fine to carry up to thirty percent of your available credit lines. It is not. I did it. I carried twenty-nine percent to test the theory and my score dropped from 811 to 730, a drop of 81 points. Only carry a balance if you can’t pay it in full to maximize your score.”

Keep those old cards open.

Paying down your debts is good—and be good we mean “pretty necessary to maintaining a good credit score”—but there are other actions you can take to make sure that your credit utilization remains as low as possible.

Remember, there are two sides to your credit utilization ratio: The balances owed, and the total available credit. So while you pay down your balances, why not make sure that your total available credit remains as high as possible?

“Avoid closing down a credit card even if you don’t need it anymore (unless it has an annual fee).” said Abramson. “When you close a credit card, your available line of credit shrinks, which can negatively impact your utilization ratio.”

And that’s not the only reason you should keep those old cards open. “Credit bureaus look at the average age of your accounts,” said Davis. “The older, the better.”

Be patient.

This is the hardest part of building your credit score. But if you’re really serious about the project, it’s something you can’t avoid.

“Time is the best credit-builder,” said Abramson. “If you handle your credit responsibly and avoid any derogatory remarks on your credit file, you will easily increase your score by a large margin within a year.”

These changes aren’t going to happen overnight. In order to fix your credit score—whether you want to raise it by 50 points, 100 points, or 150—you’re going to need to be patient. Just remember: The reward waiting for you on the other end will be worth it!

Here’s a story from someone who did it.

Before you set out on your own financial journey to improve your credit score, we figured you might like to hear a real-life story from someone who pulled it off. In his own words, here’s how Brandon Ballweg, founder and editor of the photography and tech website ComposeClick (@ComposeClick), managed to increase his credit score over 100 points over the past two years:

“I verified any collections that were showing on my credit report. I had several. One was reporting incorrectly, which was removed when brought to the creditor’s attention. The others I paid off, a couple of which I was able to get a pay for deletion agreement. I just did this over the phone with the collection agencies—there’s no reason to send them letters or try to get anything in writing.

“I started with a secured card and opened up a few regular credit cards and have paid them all off when the statement comes. I keep at least a small balance for most of my cards before the statement to show utilization. I keep my overall utilization under 20 percent, usually lower.

“I still have a ways to go because there are some missed payments showing on my credit report from a student loan provider. I hope to get these removed by communicating with the provider and pointing out the fact that I haven’t missed a payment in over a year and a half.

“That’s it. I don’t think anyone should be using expensive credit repair services that only do things that you would be able to do more effectively yourself. It’s all about getting as many negative marks removed from your credit reports and showing consistent responsible credit use.”

To learn more about how you can improve your credit score and your long-term financial outlook, check out these other posts and articles from OppLoans:

Uri Abramson is the co-founder of the growing personal finance blog OverdraftApps.com (@overdraftapps), which specializes in transparent and honest reviews of financial products for low-medium credit score population and debt resolution advice.

Brandon Ballweg is a photographer and entrepreneur. He is the founder of ComposeClick (@ComposeClick), an educational site for photographers that provides information on the technical aspects of photography and how to succeed in the photography business.

G. Brian Davis is a landlord, personal finance writer, and co-founder of SparkRental.com (@SparkRental), which provides free video courses and rental investing tools for landlords. He spends most of the year overseas, splitting his time between Abu Dhabi, Europe, and his hometown of Baltimore.

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